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Pandora Plunges Following February Metrics, Spotify Announcement

Updated from 9:13 a.m. to include updated share price and news about Spotify purchase in the third paragraph.

NEW YORK (TheStreet) -- Pandora(P - Get Report) shares plunged 6.2% to $36.99 in early Thursday trading following concerns that listeners are no longer using the Internet radio service, and it's going to stop providing monthly metrics.

In the month of February, Pandora announced that listening hours for the month were 1.51 billion, a year-over-year increase of 9% during February 2013. Over the past four months, listening hours have decelerated, leading some to believe that competition from Spotify, Apple's(AAPL) iTunes Radio, iHeartRadio and others may be eating into the company's listening audience. Today the leading Internet radio service announced new metrics that were reached in the month of February 2014.

Spotify announced on Thursday it would be buying The Echo Nest, a music intelligence company "to leverage the echo nest's in depth musical understanding and tools for curation to drive music discovery for millions of users around the globe.

Pandora's share of total U.S. radio listening in the month was 8.91%, up from 8.25% last year, and up from 8.57% in January. The company said it had 75.3 million active listeners in the month, up 11% year over year.

In the release, Pandora said it "intends to discontinue its monthly disclosure of key audience metrics. The final monthly release will be provided in June 2014 (covering audience metrics for May 2014). The company's standard practice of providing listener metrics on a quarterly basis will continue unchanged."

It now believes that due to "recent changes in the marketplace, including Triton Digital's Webcast Metrics Local recently achieving Media Rating Council Accreditation, Pandora believes advertisers can now access the necessary tools to make accurate side-by-side comparisons."

Pandora has recently been working on expanding its in-car opportunities. At the Consumer Electronics Show in January, Pandora unveiled in-car advertising to offer advertisers better targeted ads, and get a better return on investment.

For the first quarter, analysts expect Pandora to report a loss of 14 cents a share on $174.77 million in revenue.